KEY ESTATES are an established Estate Agency based on the Costa del Sol and Costa Blanca and shortly a new office opening in the UK. Our current two branches are located in Calahonda- Costa Del Sol and Torrevieja- Costa Blanca.

SIPPS (Self Investment Pension Plans)

6th April 2006
is A Day. Everything about pensions changes then: mostly for the
better, and you need to plan for those changes now.

1. You can get tax relief on all your income

2. Your pension can buy buy-to-lets, holiday homes and villas abroad; and it can even take out a mortgage!

3.
You control how you take you pension when you retire, you never have to
buy an annuity and your kids can inherit your pension when you die

1. Tax relief on all income
You can pay all your income into a SIPP (up to a maximum of £215,000
pa) and get full tax relief on it. So, if for instance, you earn
£100,000 a year and you are sitting with cash in a bank account that
you don’t need, you can pay £100K into your SIPP and it will cost you
as little as £60K after full tax relief.

One
amazing thing is that you can start a pension for your children and get
tax relief on that, and the money goes outside of your estate for IHT
purposes, so if you have spare cash and want to help your kids enjoy
their future it is worth considering.

2. Your pension can buy Property
A SIPP is a self invested personal pension. It can buy property in the
UK or Abroad. You can even sell it property you already own, and hence
free up the equity. What’s more, your SIPP can take out a mortgage to
help with the funding. And, of course, you can move your existing
pension funds into your SIPP, so that takes the money away from pension
company funds and frees it up to buy property.

The tax advantages of your SIPP owning property are huge.

a)Rental Income is tax free, you pay no Income Tax
b)You don't pay Capital Gains Tax
c)Assets within your SIPP are not part of your personal estate on death.

So,
if you personally own another property, the rent you receive could be
eaten away by tax; when you sell the property the Taxman takes another
bite, and if you die he gets you again. But, put that property into a
sipp and the Inland Revenue will let you enjoy enormous tax advantages.
That is why sipps are the hottest thing happening and millions of
people will take one out over the next few years.

3.
Compulsory Annuities cease and Retirement flexibility increases Most
people hate having to buy an annuity when they die. With an annuity you
give up your pension funds and instead you get an income for life, but
that dies with you (or your partner). So, as well as being very
inflexible it is poor value for money if you die early and does not
allow you to pass your pension funds on to your children or
grandchildren.

After A Day, 25% tax-free cash can
be taken from your SIPP. You then choose how to take an income, and you
don’t have to take any income if you don’t want to! On your death your
remaining pension fund goes to your nominated beneficiaries.

What should you do now?
If you have existing pension funds, you need to get these moved into a
SIPP now. It can take quite a time for these transfers to happen, and
you want the funds available for A Day.

If
you are buying a property off-plan, your SIPP can pay the deposit now.
SIPPs can’t buy property until next April, but they can start to buy
off-plan, so you need to know how the process works.

So,
in summary, take expert advice now. The clock it ticking for the most
tax efficient, flexible way to buy property that this country has ever
allowed.